Key facts
- Lebanon's parliament passed amendments to a bank resolution law.
The International Monetary Fund has welcomed Lebanon's parliament passing amendments to a bank resolution law, calling it a major step. However, challenges to implementation could further delay economic recovery.
These reforms are crucial for Lebanon to access IMF funding and begin addressing its severe economic crisis, which has seen banks impose capital controls and depositors locked out of their savings.
The International Monetary Fund has welcomed amendments to Lebanon's bank resolution law passed by parliament, describing it as a significant step toward economic recovery. The reforms, which include changes to the Central Bank's governance procedures and the Higher Banking Commission's composition, aim to address the financial system's vast funding shortfalls and facilitate gradual recovery for depositors locked out of their savings since the 2019 financial collapse.
Legislator Alain Aoun stated that 99% of the IMF's demands were met. Federico Lima, the IMF representative in Lebanon, emphasized that the effective implementation of this new framework is critical and that discussions are ongoing regarding the Financial Stabilization and Depositor Recovery law.
Despite the parliamentary approval, the law still requires presidential assent and could face challenges before the Constitutional Council, a body that has previously annulled financial legislation, potentially leading to further delays. The World Bank ranks Lebanon's economic crisis among the worst globally since the mid-19th century, with the Lebanese pound falling over 90% and an estimated $7 billion in damages from the conflict with Israel.